There are plenty of "Average people" that entered near the top, and since not everyone can sell simultaneously, that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down.
I think the point being made here is that the whole narrative of "average people beating wall street" is pretty naive and quite bullshit. All in on, maybe a few handful of people got 10x or even 100x their money, but most of the gains were most likely made by hedge funds and with the exception of one or two hedge funds who were squeezed, the majority of losses will probably be by average people.
Lurking the wsb threads now it's clear that none of these people have exit strategies, or even strategies at all.
Even if that fabled squeeze was to take place I'm sure many of them would still be left holding the bags because they wouldn't know when to sell. And again, at this point I'm really not sold on that squeeze theory at all, it seems very plausible that it ended last week and now we're just seeing a good old pump-and-dump taking place.
In the end some people are going to be very lucky and some others are going to learn a very expensive lesson about the dangers of gambling.
Well in fairness to WSB, it was really built around loss porn, not sticking it to the hedge funds. So even those people losing their life savings are contributing the to the WSB cause so long as they show off all the red.
> The Reddit poster Volkswagens1, who declined to give his name but said he lives in the Pacific Northwest, showed The Washington Post an image indicating roughly $400,000 in potential GameStop losses from the day but insisted he would not sell.
> He said he’s poured most of his saving and checking accounts into the stocks and spent the last week “doing as much research as possible,” including sacrificing sleep and calling in sick to work, to make sure he was staying on top of the market’s moves.
(There's also a quote about him doing this because he's been poor for too long, but my take is that if you have enough assets to face a $400k loss, you weren't poor before you entered that position, even if you may now be).
> if you have enough assets to face a $400k loss, you weren't poor
It’s not clear to me this has sunk in w ‘Volkswagens1 nor the loss has really been faced. I’d bet the sober second thought will come after this article was published
$400K is 1/2 the average cost of a house in Seattle. I'd suggest there's an argument that if you can't own (no mortgage) a house in your area, you're still 'poor'.
Still not a great move to dump your entire worth into meme stocks.
You cannot cite the average cost of a house while dismissing the idea of buying a house using a mortgage. Mortgages are a part of the housing market and are part of the reason prices are what they are. If there were no mortgages prices would be lower, and the market would be structured completely differently.
I suspect the stories will emerge once the GME price truly tanks. No, I don't think it'll be millions of people, but reading the level of delusion in that sub I don't think it's going to be tens of people either.
It doesn't even have to be big sums. Just someone who only had say $2,000 trying to make a quick play at the peak but ended up with less than $2,000 after all is settled. That'll turn some away from stocks for a good while.
> “I have $6k in $AMC that’s like 90% of my money.”
That could be a lot of money to him, but it is not a lot of money compared to what an average worker earns in a year. A probably-young guy losing $6k on a risky stock bet is not life-destroying.
Also, depending on when he bought he could actually be up. And even if he bought at the top, it would still be worth something like 40% of that.
The thing that kills me is the handful of responses of people defending it by basically saying "people will go to the movies after covid", without the context of where AMC was at before covid. Even during it's best years, AMC wasn't worth what people think it will be. It's just a complete lack of reasoning.
So strange that YOLO has come to mean the opposite of what one would do if worried about the fact one only lives once. But I guess that's true for much slang.
YOLO has always meant, you only live once, gotta try everything. Not you only live once, make it last as long as possible and never do anything dangerous or with possible (probable even) negative repercussions.
There is this example [0]. Maybe not their whole life savings, but still a sizeable chunk. I'm sure there are a LOT of other people in similar scenarios now, who may not have fared much better.
I definitely saw someone bragging about using their $20,000 line of credit from dental school (I assume this is intended for living expenses) to buy GME stock.
That's kind of worse than YOLOing your life savings, because if this prevents them from continuing their education, it just fucked their life.
> There are plenty of "Average people" that entered near the top, and since not everyone can sell simultaneously, that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down.
Most of "average people" entered at or near the top. The ones that did not were so engaged in gambling that they did not sell when it did 20x return. Call it what it is: fear of missing out.
Even DeepFuckingValue, who sold at least some of this position and netted a lot of money after taxes was not smart enough to say that 20x return in a few months is a time to pack the toys and go home so he could fight another day, leaving millions on a table in a futile hope that it would do much, much better.
I think DeepFuckingValue is smarter than you give him credit for. It's worth leaving $20M on the table if it lets you tell the SEC "look, I'm clearly an idiot, there's no way I could have been deliberately engineering a pump and dump scheme".
Better to take $15M of profit than to gamble $35M on the SEC deciding not to prosecute.
My point is that the sub didn't take him and GME seriously until December or something. You can't be a laughing stock and a pump and dump mastermind at the same time.
I'm not so sure about that. Spending 2 years trying to pump the stock and failing doesn't change what happened later. You can't escape a murder charge by saying "I spent two years trying and failing to kill the victim"!
If he did offload his entire position at the "top", and became seen as a symbolic catalyst of a subsequent drop, I reckon it's randomers on the internet that took a loss that he'd be more worried about.
Especially when the newspapers decided to plaster his real identity all over the place.
It's completely possible that DFV has a second account that he doesn't share screenshots of, that bought puts on the stock near the peak just to hedge.
I think the point being made here is that the whole narrative of "average people beating wall street" is pretty naive and quite bullshit. All in on, maybe a few handful of people got 10x or even 100x their money, but most of the gains were most likely made by hedge funds and with the exception of one or two hedge funds who were squeezed, the majority of losses will probably be by average people.